Advantages and Disadvantages of Franchising

SUMMARY OF ADVANTAGES AND DISADVANTAGES

One of the most significant advantages of franchise is the high probability of success, having in mind the franchise brands have a positive track records and instant recognition. For example, McDonald’s, Raising Canes, Subways, etc. Therefore if the company is well-recognized around the nation or even the world, there is a low risk of investment in that franchise than trying to do something on your own. In addition to that, the franchisors provides a support on how to manage the business. They have spent a lot of years in order to get the formula on how to make the business run and the risk is a lot less about market risk than a lot more the execution risk. In most of the cases the franchisor provides an operating guide of how the business should be run by the franchisee. Another advantage is the purchasing power that the franchisee can get. For example, a low cost for products that the business needs. A major advantage that comes with having a franchise is that the franchisors give the franchisee a territorial right over a certain area. Having this, the franchisee can be sure that he or she will not have any competition of the same business in that territorial right he or she has.